Is College Worth It? Clearly, New Data Say

It’s
enough to create a wave of questions about whether a college education is
still worth it.

A new set of income statistics answers those questions quite
clearly: Yes, college is worth it, and it’s not even close. For all the
struggles that many young college graduates face, a four-year degree has
probably never been more valuable.

The pay gap between college graduates and everyone else reached
a record high last year, according to the new data, which is based on an
analysis of Labor Department statistics by the Economic Policy Institute in
Washington. Americans with four-year college degrees made 98 percent more an
hour on average in 2013 than people without a degree. That’s up from 89 percent
five years earlier, 85 percent a decade earlier and 64 percent in the early
1980s.

There is nothing inevitable about
this trend. If there were more college graduates than the economy needed, the
pay gap would shrink. The gap’s recent growth is especially notable because it
has come after a risein the number of college
graduates, partly because many people went back to school during the Great
Recession. That the pay gap has nonetheless continued growing means that we’re
still not producing enough of them.

“We have too few college graduates,” says David Autor, an M.I.T. economist, who
was not involved in the Economic Policy Institute’s analysis. “We also have too
few people who are prepared for college.”

It’s important to emphasize these shortfalls because public discussion
today — for which we in the news media deserve some responsibility — often
focuses on the undeniable fact that a bachelor’s degree does not guarantee
success. But of course it doesn’t. Nothing guarantees success, especially after
15 years of disappointing
economic growth and rising inequality.

When experts and journalists spend
so much time talking about the limitations of education, they almost certainly
are discouraging some teenagers from going to college and some adults from
going back to earn degrees. (Those same experts and journalists are sending
their own children to college and often obsessing over which one.) The decision
not to attend college for fear that it’s a bad deal is among the most economically irrational decisions
anybody could make in 2014.

The much-discussed cost of college doesn’t change this fact.
According to a paper by Mr. Autor
published Thursday in the journal Science, the true cost of a college degree is
about negative $500,000.
That’s right: Over the long run, college is cheaper than free. Not going to
college will cost you about half a million dollars.

Mr. Autor’s paper — building on work by the economists Christopher Avery and
Sarah Turner — arrives at that figure first by calculating the very real cost
of tuition and fees. This amount is then subtracted from the lifetime gap
between the earnings of college graduates and high school graduates. After
adjusting for inflation and the time value of money, the net cost of college is
negative $500,000, roughly double what it was three decades ago.